The Size of UK Digital Commerce Market

Digital commerce mainly involves selling and buying of goods and services via mobile networks or the internet. Digital commerce includes several features such as transactions involving information transfer across the internet, participating in online marketplaces which involve 3rd-party consumer-to-consumer or business-to-consumer sales, trading of services or products using the internet, collecting demographic data via social media or web contacts and marketing to established and prospective customers by e-mails.

UK digital commerce market has grown rapidly over the last few years and continues to develop and experience high growth in developing and developed markets. Today, most UK customers go through businesses websites before visiting the stores to compare products and prices. This is one reason why retailers are increasing their online presence in the UK.

The UK digital commerce market is the third strongest in the world and the strongest in Europe. Last year, the country showed remarkable growth in mobile-based purchase, accruing more than $28 billion in sales. According to PayPal, 59 percent of online transactions in the United Kingdom are made through mobile devices.

This year online retail industry is growing at 10.5 percent and is expected to reach 173.7 billion euros. In 2015, the UK ecommerce industry increased by 11% to reach 157 billion euros. According to the report released by Ecommerce Foundation, more than 43 million British people shopped online in 2015, of which 20% used a mobile device. On average, 3,652 euros was spent by the British online shopper.

Although the digital buyer penetration in the UK is the highest in Western Europe, only 36 percent of the digital buyers made cross-border purchases in 2015. However, cross-border spending is projected to increase this year to about 50 percent.

Just like in other countries, clothing is the most popular online product in the UK. Media & Entertainment and Shoes & Lifestyle are other popular categories. About online services, travel is where most consumers spend their money. Hotel accounts and flight tickets account for half of the market share, closely followed by private transport and package travel.

Last year, mobile sales reached 31.1 billion euros, which is about 20% of total ecommerce income in the UK. In 2015, the UK had about 40 million digital buyers, with the total expected to reach 43 million in 2018. It was also reported that 70 percent of Brits who were above 15 years were using a smartphone. In 2012, this portion was just 51%. Now, about 65% of British adults have both a smartphone and a tablet. This is an indication that UK Digital Commerce Market is growing fast.

Talking about online payments, the market is ruled by debit cards. In 2015, 45% of British online purchases were made via debits cards. Other popular payments methods were PayPal (23 percent), credit cards (14 percent) and bank transfers (6 percent).